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On the Record

The Fed in the Crisis and Beyond: New Policies, Old Principles

Donald Kohn, Robert S. Kerr senior fellow in economic studies at the Brookings Institution and its Hutchins Center on Fiscal and Monetary Policy, recently spoke at Virginia Tech on “The Fed in the Crisis and Beyond: New Policies, Old Principles.” Kohn, who served on the Fed’s Board of Governors from 2002 to 2010, the last four years as vice chairman, asked students to consider what would have happened had the Fed not pursued the policies of reducing interest rates to zero and then buying trillions of dollars in bonds in what has become known as “quantitative easing.” He described the Fed’s strategy in what he called “unprecedented circumstances” as relying on proven principles and central banking and then innovating “until something works to achieves the Fed’s goals.”

Click here to download Kohn’s slide presentation.

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